Former Yukos Owner Back in Spotlight

Mikhail Khodorkovsky, former Russian oil baron, has slowly faded from the spotlight of the investment community since he was jailed in 2003. But that may be about to change.

Deutsche Bank strategist Yaroslav Lissovolik said in a note to clients this week that Mr. Khodorkovsky stands a fifty-fifty percent chance of parole.

The odds of Mr. Khodorkovsky’s parole are “significantly higher than any time in the past,” the strategist said, adding that the businessman’s release would trigger a rally of 5% to 10% in Russian stocks.

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Mr. Khodorkovsky, head of the now-bankrupt Yukos oil company and formerly Russia’s richest man, was arrested in 2003 and found guilty of tax evasion—a sentence his supporters say was punishment for daring to finance opposition to then-president Vladimir Putin. His arrest strongly worsened the perception of Russia’s investment climate.

Since then, Mr. Putin has been in no mood for reconciliation, saying in 2010 that a “thief must be in prison.” Then, Mr. Khodorkovsky was convicted a second time, this time on charges of stealing some 200 million tons of oil from Yukos subsidiaries, once again rattling investors as proof of the dangers of doing business in Russia.

But a Kremlin human-rights panel has urged President Dmitry Medvedev to free Mr. Khodorkovsky before Vladimir Putin is inaugurated for his third presidential term in May. The panel—set up by Mr. Medvedev as part of a reform of the country’s justice system—called the conviction of Mr. Khodorkovsky “a fiction” and said the prosecutor had “no evidence” to support the charges.

Mr. Medvedev ordered Prosecutor General Yuri Chaika to finish a review of the case along with 30 other cases by April 1.

Comments (3 of 3)

Khodorkovsky’s rise to riches is due to his tight connections to the formerly Communist elites in the Yeltsin Family, and the deliberate mismanagement and mangling of the Russian peoples' savings (in the ruble) by the Liberal administration. After all, the United States was giving him a lifeline in dollars - an advantage none of the ordinary Russians were given.

11:36 am March 28, 2012

Thomas H wrote:

The undertaking of Mr. Khodorkovsky's detention, from what has appeared in the press, was apparently quite serious and without prejudice to anything else, made with much effort by the Russian government at the time. The process of Mikhail Borisovich's (Icarus - like) trajectory from ordinary businessman to oligarch, etc., have been well documented in "Kremlin Rising," and "Putin's Oil." These and other texts talk about Russian politics and while showing an apparent downside of 'managed capitalism' in Russia and the like, do apparently avoid speaking of what the oligarchs faced with respect to the tax regime in their home country. Most people do agree that the trials and tribulations of Mr. Khodorkovsky and his associates have been unnecessary, though it remains difficult with the opaque image of Russian justice what the goal of the Russian authorities with respect to the oligarchs has been, especially given the overall reliance of the system of justice in countries like Russia upon strict adherence to statutes and the advantages of prosecutors over defendants and their attorneys. Above all, the defendants in the Yukos case need to have been given a voice or voices apart from the rhetorical stridency they used at court. They have not been allowed this, and to do so could in fact offend many people in Russia itself (speculation here,) and not just its vast federal administration on the subject at this point.

4:49 pm March 27, 2012

Bruce w Bean wrote:

Khodorkovsky's chances of pardon are very much higher than previously, but previously the odds were 99:1
Now they may be as high as 50:1
Either way he and Platon Lebedev will remain as guests of Putin's government.

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